If talking about money causes you stress, use these strategies to overcome your biggest financial fears.
A version of this article originally appeared on Learnvest.com.
If you let money matters like setting a budget or taking a peek at your credit report scare the bejeebers out of you, you could make some truly fearsome financial decisions. That’s because, while we no longer contend with saber-tooth tigers on our daily commute, our brains still react in the same way to anything we deem threatening—including financial threats. “As far as the brain is concerned, a threat is a threat is a threat. And instinctively, it pushes us to avoid these threats as if they were threats to our lives,” says Simon Rego, Psy.D., director of psychology training at Montefiore Medical Center/Albert Einstein College of Medicine. In fact, one of the most difficult fears to discuss is the worry surrounding money, says John Sharp, M.D., Harvard psychiatrist and author of The Emotional Calendar ($26, amazon.com). Usually this is because of fear–fear of inadequacy, lack of planning or lack of confidence. Here are tips for overcoming for of the most common worries.
1. The Fear of Budgeting
Budgeting is very scary to many people—of all ages, and from all walks of life, says Kevin Gallegos, vice president of Phoenix Operations for Freedom Financial Network, who helps clients evaluate debt repayment options. “People think setting a budget is more complicated than it needs to be, or that it will restrict them too much and ‘curb their style,’” he says. In fact, budgeting tells you exactly what you have so you can spend (and save) with confidence. But that doesn’t matter if sitting down to balance your bills makes you break out in a cold sweat.
Face the fear: “The best strategy for this fear is something called graded exposure,” says Rego. “This means you gradually, systematically and repeatedly face your fear.” Do that by breaking down the task into not-so-scary, bite-sized piece, he advises. Instead of trying to set a yearly or even monthly budget, start by setting a budget for tomorrow. Do that for a week or two, and then move on to setting a weekly budget. Over time, you’ll kick your fear and be on your way to a bottom line that won’t scare your pants off. Honest.
2. The Fear of Being Honest
Tempted to “hide” a purchase from your spouse, or fib about the new credit card you opened to score a discount on your kid’s Halloween costume? It’s known as financial infidelity and it’s a very common habit in relationships. “Fessing up to a spouse or significant other about splurges, spending or other financial matters is a common fear,” says Tim Brinkmann, Certified Credit Counselor at ClearPoint Credit Counseling Solutions in St. Louis, MO. “I’ve had a few clients who have explicitly told me not to include their spouses as co-applicants [for debt counseling] for fear of a ‘discussion’ about overdraft charges, charged off credit cards, etc.”
Face the fear: Both men and women may be afraid to be honest, says Rego, but honesty truly is the best policy. The path to honesty starts on neutral ground. Face this fear by asking your mate to meet for coffee; Rego explains that there’s less chance anyone will boil over in front of a barista. Then start by setting ground rules that you won’t judge each other, but will instead work toward better communication to avoid the need to fib about your finances in the future. One way to avoid little white lies is to make sure you manage your money in a way that works for both of you.
3. The Fear of Using Credit
While many people go overboard and carry too much credit card debt, others are afraid to get a credit card or use credit at all. But credit agencies rely on past payment history to gauge how borrowers will do in the future, says Brinkman. If you don’t borrow, they have no information to rely on, and, in future, you could face bigger impediments, like not being able to buy a home. Paying student loans, car loans, and other bills on time (and in full) helps build a credit history, and a better score,” says Brinkman.
Face the fear: Rego suggests analyzing what you predict will happen if you get or use a credit card. Are you worried that you’ll spend yourself into debt, or that if you apply for a card and get rejected, you’ll feel bad? If you’re too terrified to apply for a card, you can check your credit score for free at CreditKarma.com and see where you stand. If you don’t trust yourself to manage spending, you need to confront that fear directly–by putting yourself in the scary situation. “Get a credit card with a low limit and only carry it in certain situations (for instance, to the grocery store and gas station) to test your discipline and overcome your fear,” says Rego. By tackling this fear in stages, eventually you’ll be able to trust yourself with credit and use it wisely—which will benefit you in the long run.
4. The Fear of Reviewing Your Bills/Bank Statements
Avoidance–in the form of letting bills pile up, or turning a blind eye to reviewing bank statements or your credit report–can be devastating to your bottom line. Not looking over bank statements can lead to paying exorbitant overdraft fees, not having enough money to pay bills on time, or missing critical errors in your credit report, which does happen. Besides, avoiding your finances doesn’t make them go away, it only compounds your anxiety, instead of what could be in your interest-bearing savings account.
Face the fear: Tell yourself that not knowing is worse, says Sharp. “Then bravely get support from a trusted financial advisor, accountant, banker, lawyer, or a friend to help you review and interpret your financial documents.” No matter what you find, Sharp says only through knowing what the situation is can you deal with it and work toward getting on stronger financial footing.